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Aviva PLC shares jumped on Wednesday, as it reported an ‘excellent’ first half and reiterated it is confident of meeting annual targets.
Shares in the London-based insurance company were up 8.7% to 450.45 pence each in London on Wednesday morning.
In the six months to June 30, its IFRS loss widened to £633 million from a £198 million loss a year prior. Aviva explained that this ‘largely’ reflects adverse market movements and has no impact on capital or cash remittances. Adjusted operating profit rose 14% to £829 million from £725 million.
UK & Ireland Life sales were up 4% to £16.84 billion, from £16.24 billion the year before. Notably, sales in its Annuities & Equity Release division climbed 12% to £2.76 billion compared to £2.47 billion.
Aviva's General Insurance gross written premiums rose 7.3% to £4.69 billion from £4.37 billion, but the combined operating ratio worsened to 94.0% from 91.6%. A combined ratio below 100% indicates underwriting profit.
New business sales in its Life unit were up 3.0% to £17.4 billion from £16.9 billion.
Its Solvency II cover ratio fell to 234% from 244%.
Aviva declared an interim dividend of 10.3p per share, rising 40% from 7.35p a year earlier, in line with its full year guidance of around 31.0p per share. The interim dividend is worth a total of £289 million.
Looking ahead, Aviva said it is confident of its outlook for 2022, despite a challenging market backdrop. The insurer also said it expects to start a share buyback programme when its 2022 full year results are announced.
It also expects full year Solvency II cover ratio of 213%, for a further £1 billion debt reduction, pension scheme payment and the £385 million acquisition of Succession Wealth, which is expected to be complete in the second half of the year.
Chief Executive Amanda Blanc said: ‘Overall, Aviva is in excellent health and our strategy is delivering results. We enter the second half of 2022 with confidence and while we remain mindful of market and macro-economic challenges, we are on track to meet all of our financial targets.’
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